RenaissanceRe Holdings Ltd. Reports 15% Drop in Q1 1999 Net Income

Strategic Insights -

RenaissanceRe Holdings Ltd., a global provider of reinsurance and insurance, reported a 15% drop in first-quarter 1999 net income, citing the higher loss ratio connected with subsidiary Nobel Insurance Co. The company's net income dropped to $30 million or $1.41 a share, from $35.7 million or $1.57 a share for the same period in 1998. Net operating income, excluding realized investment gains and losses, fell to $30.5 million or $1.43 a share, from $34.4 million or $1.52 a share for the first quarter of 1998.

Key Takeaways:

  • RenaissanceRe's Q1 1999 net income dropped 15% to $30 million or $1.41 a share, from $35.7 million or $1.57 a share in Q1 1998.
  • The company's combined ratio increased to 55 for the first quarter of 1999, from 44 in the same period last year.
  • Gross reinsurance premiums increased to $133 million in Q1 1999, from $105 million in Q1 1998.
  • Operating expenses increased to $9.5 million in Q1 1999, from $6.4 million in Q1 1998, due to Nobel's primary insurance activities.
  • Despite growing pains, Renaissance Re reported a 20% return on equity.
  • The company's primary business accounts for only $22 million of the $155 million in gross premiums written.

Statistics:

  • First-quarter net income: $30 million (Q1 1999) vs. $35.7 million (Q1 1998)
  • Net operating income: $30.5 million (Q1 1999) vs. $34.4 million (Q1 1998)
  • Combined ratio: 55 (Q1 1999) vs. 44 (Q1 1998)
  • Gross reinsurance premiums: $133 million (Q1 1999) vs. $105 million (Q1 1998)
  • Operating expenses: $9.5 million (Q1 1999) vs. $6.4 million (Q1 1998)
  • Return on equity: 20% (1999)
  • Primary business gross premiums: $22 million (1999)

Sources:

  • RenaissanceRe Holdings Ltd. press release, May 07, 1999
  • A. M. Best Company, Inc.
  • COMTEX News (http://www.comtexnews.com)
  • Dennis Kelly, associate editor, BestWeek (kellyd@ambest.com)